Cboe TO OFFER DAILY EXPIRIES FOR RUSSELL 2000 INDEX OPTIONS SUITE, BEGINNING JANUARY 8, 2024
Cboe to list Tuesday and Thursday-expiries for Russell 2000 Index Weeklys® (RUTW) options and Mini-Russell 2000 Index Weeklys (MRUT) options
New listings will expand product suite to offer expirations every trading day of the week
Reflects growing investor demand for hedging and tactical trading with short-dated index options
CHICAGO, Dec. 21, 2023 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today announced it plans to launch Tuesday and Thursday-expiring Russell 2000® Index weekly (RUTW) options and Mini-Russell 2000® Index weekly (MRUT) options, beginning Monday, January 8, 2024. With these new listings, Cboe expands its cash-settled Russell 2000 Index weekly options suite to offer investors with expirations every trading day of the week.
The Russell 2000 Index is one of the world's premier benchmarks for measuring the performance of U.S. small-cap equities. The addition of Tuesday and Thursday-expiries will provide daily expirations for RUTW and MRUT options, enabling investors to potentially manage their small-cap U.S. equity exposures and execute targeted buying, selling or spreading strategies around market events with greater precision, flexibility and control.
"Investors are becoming increasingly sophisticated and are using short-dated index options for a variety of trading strategies," said Catherine Clay, Executive Vice President and Global Head of Derivatives at Cboe. "As evidenced by the sustained volume growth over the past couple of years, short-dated index options have become an indispensable tool for hedging, risk management, and income generation among a diverse base of market participants. As trading strategies become more tactical and average time to expiry trend shorter, our clients are seeking even more granular expiries. We're excited to continue collaborating with FTSE Russell to offer daily expiries for the Russell 2000 Index options suite and expand our customers' abilities to trade short-dated strategies across additional new products."
Total U.S. options volumes are expected to hit a new annual high by the end of 2023, surpassing the 10.3 billion contracts traded in 2022, and marking the fourth consecutive year of record-breaking volumes. In particular, trading in short-dated U.S. index options has grown among both retail and institutional investors. Options contracts expiring within one day or less account for approximately 36% of total U.S. index options flow in 2023, compared to 15% in 2020, according to Cboe data. Within the Russell 2000 Index options complex, trading in contracts expiring within a day or less constitute 17% of overall volumes in 2023.
"FTSE Russell and Cboe share a deep commitment to delivering innovative solutions that meet the evolving needs of the marketplace," said Shawn Creighton, Director of Index Derivatives Solutions at FTSE Russell. "We are excited to continue building on our successful relationship and leverage FTSE Russell's position as a leading global index provider and Cboe's deep expertise in derivatives trading to facilitate more tradeable products and investment opportunities tied to the Russell 2000 Index – the world's most comprehensive and precise measure of the small-cap segment of the U.S. equities market."
RUTW and MRUT options are European-style options (no early exercise) and cash-settled (no delivery or assignment of shares) at expiration with P.M. settlement. MRUT options are structured like standard RUTW options and similarly track the underlying Russell 2000 Index but feature a smaller contract that is 1/10th the size. MRUT offers a potentially more cost-effective way to execute small-cap equity trading strategies.
RUTW and MRUT options are exclusively listed on Cboe's options exchanges. A total of 15.2 million RUT options contracts were traded in 20231, with an average daily volume (ADV) of 63,000 contracts, representing approximately $11 billion in average daily notional value, up 39 percent from the prior year. The new Tuesday and Thursday-expiries complement the existing suite of Weeklys, end-of-month and quarterly RUTW and MRUT options.
For additional information on Cboe's franchise of FTSE Russell-based index options, visit Cboe's website.
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), a leading provider of market infrastructure and tradable products, delivers cutting-edge trading, clearing and investment solutions to market participants around the world. The company is committed to operating a trusted, inclusive global marketplace, providing leading products, technology and data solutions that enable participants to define a sustainable financial future. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX and digital assets, across North America, Europe and Asia Pacific. To learn more, visit www.cboe.com.
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1 YTD through December 15, 2023
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